Hello Friends,
Finally The State Bank of India (SBI) announced on 18th July 2016 approval of the merger of three of its associate banks and the Bharatiya Mahila Bank (BMB), with itself.Earlier in June, the government gave the go-ahead to the merge SBI with its five associate lenders and Bharatiya Mahila Bank
Merger Approval From Union Cabinet:
The union cabinet had in June approved the proposal whereby State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT), State Bank of Mysore (SBM), State Bank of Patiala and the State Bank of Hyderabad will merge with SBI. The Bharatiya Mahila Bank (BMB) will also be merged with SBI, as part of the move.
Eight things you should know about the merger:
- This is the first ever large-scale consolidation in the Indian banking industry.
- The merger will create a banking behemoth with an asset book of Rs 37 lakh crore.
- SBI will give 28 of its shares for every 10 shares held of State Bank of Bikaner and Jaipur.
- It will give 22 of its shares for every 10 shares held of State Bank of Mysore.
- The lender will give 22 of its own shares for every 10 shares held of State Bank of Travancore.
- SBI will give 4,42,31,510 shares with face value of Re. 1 for every 100 crore equity shares of Bhartiya Mahila Bank.
- The merger will see SBI’s ranking approve in the Bloomberg’s largest bank by asset ranking. It may well break through the 50-mark in the ranking.
- SBI’s asset base will now be five times larger than the second-largest Indian bank,ICICI Bank
Subject to final approvals from the Reserve Bank of India (RBI) and the government, the scheme provides for the following:
- 28 equity shares of Rs 1 each of SBI for every ten equity shares of Rs 10 each of SBBJ
- 22 equity shares of Rs 1 each of SBI for every ten equity shares of Rs 10 each of SBT
- 22 equity shares of Rs 1 each of SBI for every ten equity shares of Rs 10 each of SBM
- 4,42,31,510 equity shares of Rs 1 each of SBI for every 100 crore equity shares of Rs 10 each of BMB
